All businesses need to be financed, and cash may be particularly tight in the current economic climate. Here are a few examples of how a business may raise the funds it’s looking for.

- The owner(s) or relatives may decide to inject their own private funds to support the business. If so, what security have they got-and how do they know they’ll be paid back? The owner(s) might, for example, consider offering a private lender a share of their business.

- Borrowing from a bank; a loan or overdraft. This may be relatively expensive and a request to personally guarantee it’ll be paid back may be part of the offer.

- Borrowing form a bank; a mortgage. This may be an option where (say) the business has sufficient equity tied up in its commercial premises. A mortgage may be cheaper than an unsecured loan on the basis it’s a lower risk to the lender. It usually requires a solicitor to act for you, and guide you through the process.

- Factoring agreements. Here, a third party ‘buys’ your invoices for a set price. They can be a great way to help with cash flow but they can also be expensive, with unexpected charges and costs.

- Grants and other forms of financing. This isn’t available for everyone of course, but it’s well worth finding out if it may apply to your circumstances.

Here at Sanders Witherspoon LLP we work with our business clients to help them achieve their business finance goals.